FG, IOCs’ Loss To Crude Theft Hits N5bn Daily

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A man works at an illegal oil refinery site near river Nun in Nigeria's oil state of Bayelsa November 27, 2012. Thousands of people in Nigeria engage in a practice known locally as 'oil bunkering' - hacking into pipelines to steal crude then refining it or selling it abroad. The practice, which leaves oil spewing from pipelines for miles around, managed to lift around a fifth of Nigeria's two million barrel a day production last year according to the finance ministry. Picture taken November 27, 2012. REUTERS/Akintunde Akinleye (NIGERIA - Tags: BUSINESS ENVIRONMENT SOCIETY INDUSTRIAL ENERGY) ATTENTION EDITORS - PICTURE 23OF 28 FOR PACKAGE 'NIGERIA'S ILLEGAL OIL BUNKERERS'. SEARCH 'OIL BUNKERING' FOR ALL IMAGES - RTR3CGYO

The revenue loss by the Federal Government and international oil companies (IOCs) to crude theft has exceeded N5 billion daily.

A document of the Ministry of Petroleum Resources shared with the office of Vice President revealed that about N3 billion – being the 60 per cent of total loss – was suffered by the Federal Government.

Crude thieves, the document added, have also adopted a strategy of stealing large volume of crude by setting fire on oil installations.

Stating an average of 250,000 barrels of oil was stolen on daily basis through this act, government maintained that crude theft through pipeline sabotage had led to huge losses for oil companies and government.

Recalling that there is a surge in pipeline fire in the last three years, the document added that hundreds of thousands of crude oil are lost through the incidents.

“In October 2016, attackers set fire to a crude oil pipeline near Ughelli in Delta State, threatening more attacks until their conditions are met.

“In February 2007, the Egwa Flow Station in Warri South Local Government Area of Delta State was gutted by fire when an oil well head went up in flames,” the document stated.

Crude theft, not even the series of attacks on oil installations is, according to a document of the London- based Chatham House, the biggest conduit pipe through which Nigeria loses millions of dollars daily.

Another document of the Federal Government revealed that over $5 billion worth of crude get missing yearly at the unmetered wellheads of the oil companies.

While DPR appears to have taken the back seat, the Ministry of Trade and Investment, the document showed, had once moved to check the missing crude through unmetered wellheads. The ministry has the statutory duties of issuance of permit for exports and measurement at the wellheads.

In a review of the procedures for the issuance of export permits in the oil and gas sector, the ministry, through the Commodities and Products Directorate and the Ministry of Trade, was allegedly stopped from carrying out these statutory duties.

Recent checks by this newspaper validated earlier findings, which showed that the Ministry of Trade has the mandate of ensuring all trade transactions in the economy are legal, accurate and fair.

The Weigh and Measurement Act (2004) also empowers it to ensure that every trade transaction is scientific, legal and measurable. However, a security document designed to measure the transactions in the oil wells and flow stations, issued in the second quarter of 2012 and sighted by this newspaper, indicted the Nigerian National Petroleum Corporation (NNPC).

It showed that the Corporation officials allegedly forged documents to cart away 93 million barrels of oil.

The London- based Chatham House once stated that Nigerian crude oil is being stolen on an industrial scale. In a report published in 2013, Chatham House     claimed that the stolen product found their ways into the U.S., Europe and some Asian countries.

This is done, according to the revelation, through a trade cabal comprising Nigerian politicians, top military officers, oil companies and their partners in foreign land. The stolen crude lost recorded from onshore and swamp operations alone, according to the London- based institution, was over 100,000 barrels per day, accounting to about five per cent of total output, in the first quarter of 2013.

“Some of what is stolen is exported,” the document noted. “Proceeds are laundered through world financial centres and used to buy assets in and outside Nigeria, polluting markets and financial institutions overseas and creating reputational, political and legal hazards.

It could also compromise parts of the legitimate oil business. Officials outside Nigeria are aware that the problem exists and occasionally show some interest at high policy levels.

“But Nigeria’s trade and diplomatic partners have taken no real action and no stakeholder group inside the country has a record of sustained and serious engagement with the issue.

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